The only real value is cash you generate from customers: YC's Tim Brady & Adora Cheung

The only real value is the cash you generate from customers. The product should be the focus and not the number of press mentions.Anand J | TNN | Updated: September 26, 2016, 11:09 IST

Y Combinator is one of the world's most successful startup incubators, having funded more than 1,000 startups with the cumulative valuation touching $80 billion -Airbnb is its biggest success.

Five Indian ventures have been selected till date for their programme: Cleartax, Razorpay, Innov8, JustRide and Meesho. Tim Brady and Adora Cheung, who are among Y Combinator's 16 partners, spoke to TOI here while on a global tour of 11 countries to meet entrepreneurs and take feedback.

Excerpts:

What are your first impressions of India?

We are definitely impressed.We had worked with the Yahoo! India team before. So our expectations were pretty high and those were met. We have met so many entrepreneurs and they have all been super hungry and enthusiastic about what they are working on and are stronger than we thought.

Their technical knowledge is good. We think we got an insight into the greater problems of the country that entrepreneurs here work on. Some of those will help us to filter the Indian applications better.

Over the last year, the startup boom phase has given way to lower valuations. Has that dampened spirits of the entrepreneurs you meet?That is restricted to a few unicorns and later stage venture capital. The companies we deal with are much earlier stage and we cruise along nicely . It is a cycle and at the macro level we are optimistic.

We hope that the valuation of our companies will only increase, though the total valuation is more a function of the top 10 companies. These are companies that are 6 to 7 years old. So we see that increasing as we go forward. We don't have too many Indian companies that old that we have worked with yet. If we continue to take more, in a decade, there might be a billion dollar company from India too.

You are expanding beyond the US. You are getting a lot more applications from India...

This year, 30% of our batch was from outside the US. There is no quota and we look for companies that meet the bar. We are fully agnostic and look at everything.We have met biotech, B2B companies and online marketplaces. The common theme is great founders and big ideas... that can potentially turn into a billion-dollar company. India is a big country and you can focus on the home market and still be a big company. We are looking at unique insights into the product and market. Many Indians are working on problems different from those that their global peers are working on.

What are the most common mistakes that entrepreneurs commit?

A lot of entrepreneurs try to do so many things together when they are a lean team. The only real value is the cash you generate from customers. The product should be the focus and not the number of press mentions. Many entrepreneurs focus a lot on funding. Capital is only a tool and fund-raising is not an endgame.